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Do you diversify across all market-cap sectors? We ran a screen to find some interesting stocks from the small-cap sphere.

We began by screening the small-cap sector for stocks with positive market sentiment, rallying above their 20-day, 50-day, and 200-day moving averages.

We then screened for those that also appear undervalued relative to the Graham Number. The Graham Number is a measure of maximum fair value created by the "godfather of value investing" Benjamin Graham.

It is based off of a stock's EPS and book value per share (BVPS).

Graham Number = SQRT(22.5 x TTM EPS x MRQ BVPS)

The equation assumes that P/E should not be higher than 15 and P/BV should not be higher than 1.5. Stocks trading well below their Graham Number may be undervalued.

For an interactive version of this chart, click on the image below. Analyst ratings sourced from Zacks Investment Research.

Tool provided by Kapitall (kapitall.com).

Do you think these stocks have more value to price in? Use this list as a starting point for your own analysis.

List sorted by potential upside implied by the Graham Number.

1. Triangle Capital Corporation (TCAP): A private equity and venture capital firm specializing in leveraged buyouts, management buyouts, ESOPs, change of control transactions, acquisition financings, growth financing, and recapitalizations in lower middle market companies. Market cap at $631.07M. Price at $22.56. The stock is trading 1.86% above its 20-day moving average, 9.19% above its 50-day MA, and 23.49% above its 200-day MA. Diluted TTM earnings per share at 2.64, and a MRQ book value per share value at 15.12, implies a Graham Number fair value = sqrt(22.5*2.64*15.12) = $29.97. Based on the stock's price at $22.14, this implies a potential upside of 35.36% from current levels.

2. Iridium Communications Inc. (IRDM): Provides mobile voice and data communications services through satellites to businesses. Market cap at $705.01M. Price at $9.57. The stock is trading 6.98% above its 20-day moving average, 9.45% above its 50-day MA, and 21.65% above its 200-day MA. Diluted TTM earnings per share at 0.59, and a MRQ book value per share value at 9.77, implies a Graham Number fair value = sqrt(22.5*0.59*9.77) = $11.39. Based on the stock's price at $8.83, this implies a potential upside of 28.97% from current levels.

3. Wilshire Bancorp Inc. (WIBC): Operates as the holding company for Wilshire State Bank that offers a range of financial products and services. Market cap at $382.77M. Price at $5.39. The stock is trading 1.19% above its 20-day moving average, 3.31% above its 50-day MA, and 30.26% above its 200-day MA. Diluted TTM earnings per share at 0.54, and a MRQ book value per share value at 3.76, implies a Graham Number fair value = sqrt(22.5*0.54*3.76) = $6.76. Based on the stock's price at $5.27, this implies a potential upside of 28.25% from current levels.

4. First Merchants Corp. (FRME): Provides financial and banking products and services. Market cap at $362.33M. Price at $12.76. The stock is trading 4.70% above its 20-day moving average, 5.45% above its 50-day MA, and 25.47% above its 200-day MA. Diluted TTM earnings per share at 0.65, and a MRQ book value per share value at 15.27, implies a Graham Number fair value = sqrt(22.5*0.65*15.27) = $14.94. Based on the stock's price at $12.17, this implies a potential upside of 22.79% from current levels.

5. Threshold Pharmaceuticals Inc. (THLD): Engages in the discovery and development of drugs targeting the microenvironment of solid tumors for patients living with cancer. Market cap at $437.09M. Price at $7.85. The stock is trading 9.56% above its 20-day moving average, 14.73% above its 50-day MA, and 89.70% above its 200-day MA. Diluted TTM earnings per share at -2.69, and a MRQ book value per share value at -1.43, implies a Graham Number fair value = sqrt(22.5*-2.69*-1.43) = $9.30. Based on the stock's price at $7.61, this implies a potential upside of 22.25% from current levels.

6. Great Southern Bancorp Inc. (GSBC): Operates as the bank holding company for Great Southern Bank that offers various banking products and services in Missouri, Iowa, Kansas, Nebraska, and Arkansas. Market cap at $385.02M. Price at $28.70. The stock is trading 10.07% above its 20-day moving average, 18.33% above its 50-day MA, and 28.99% above its 200-day MA. Diluted TTM earnings per share at 2.12, and a MRQ book value per share value at 20.27, implies a Graham Number fair value = sqrt(22.5*2.12*20.27) = $31.09. Based on the stock's price at $25.94, this implies a potential upside of 19.87% from current levels.

7. Metals USA Holdings Corp. (MUSA): Market cap at $619.34M. Price at $16.83. The stock is trading 11.02% above its 20-day moving average, 13.05% above its 50-day MA, and 31.55% above its 200-day MA. Diluted TTM earnings per share at 1.84, and a MRQ book value per share value at 7.4, implies a Graham Number fair value = sqrt(22.5*1.84*7.4) = $17.50. Based on the stock's price at $14.65, this implies a potential upside of 19.48% from current levels.

*BVPS and EPS data sourced from Yahoo! Finance, all other data sourced from Finviz.

Source: 7 Rallying Small-Caps Undervalued By The Graham Number